Plans unveiled to make Vauxhall and Opel profitable by 2020 as owner PSA seeks to avoid forced redundancies in Europe

Rebecca Smith
PSA bought Vauxhall and Opel from General Motors
PSA bought Vauxhall and Opel from General Motors (Source: Getty)

PSA-owned Opel and Vauxhall will seek to avoid forced redundancies across their European plants, a turnaround cost-cutting plan announced today.

PSA, bought the Vauxhall and Opel brands from General Motors in a €2.2bn (£1.96bn) deal earlier this year, and today unveiled plans to return them to profitability by 2020, with a focus on electric vehicles.

The intention is to keep all current plants open, including Luton and Ellesmere Port, with PSA looking to make them more efficient.

In the announcement, made by newly appointed chief executive of Opel Automobile GmbH, Michael Lohscheller, the firm said all passenger car lines will be electrified by 2024, offering a pure battery electric propulsion or plug-in hybrid version, alongside efficient internal combustion engines.

Read more: Vauxhall is cutting 400 jobs at one of its UK plants

The company said: "The plan is designed with the clear intention to maintain all plants and refrain from forced redundancies in Europe. The necessary and sustainable reduction of labour costs shall be reached with thoughtful measures such as innovative working time concepts, voluntary programmes or early retirement schemes."

It will shift its entire model lineup onto PSA's architecture more quickly than previously planned, with Opel and Vauxhall rolling out nine new models by 2020, and then completing the move across four years later, as PSA looks to stem losses.

The plans will contribute to "a lower financial break-even point" for Opel/Vauxhall of 800,000 vehicles, creating a profitable business model "whatever the headwinds may be".

In terms of expansion, Opel plans to enter more than 20 new export markets by 2022, including the likes of Argentina and Taiwan.

Last month, it was announced that Vauxhall is planning to cut 400 jobs at its Ellesmere Port operation by the end of the year, affecting nearly a quarter of the workforce.

PSA had said Vauxhall needed to adjust production volumes to the current level of demand amid challenging market conditions and a declining passenger car market, in order to protect its future.

Read more: Peugeot owner PSA revs up revenues for the first quarter

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